Take-Two is acquiring Zynga for $12.7 billion in cash and shares.
The terms are as follows: Take-Two is getting all of the outstanding Zynga shares for $9.86 apiece, which is a 64% premium on Friday’s closing price. Zynga shareholders will get $3.50 in cash and $6.36 in Take-Two common stock shares.
Take-Two Chairman and CEO Strauss Zelnick will continue to run the combined company under his current titles. Zynga CEO Frank Gibeau and President Bernard Kim will lead Take-Two’s mobile efforts. Zynga will continue to operate as its own label within the company.
Take-Two is best known for its video games made for current and previous-gen platforms, like the “Grand Theft Auto” series and all the “2K” games, as well as “Red Dead Redemption,” “BioShock” and others. It has made mobile games like “WWE SuperCard.”
Zynga is best known for making mobile games like “Words With Friends” and “FarmVille.” Mobile gaming is the industry’s fastest-growing segment.
The transaction is expected to close in the quarter ending June 30, 2022. Take-Two will expand its board of directors to 10 members to add two members from Zynga’s board.
“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest growing segment of the interactive entertainment industry,” Zelnick said in a statement on Monday. “This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity. Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months. As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100 million of annual cost synergies within the first two years post-closing and at least $500 million of annual Net Bookings opportunities over time.”
“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” Gibeau added. “I am proud of our team’s hard work to deliver a strong finish to 2021, with one of the best performances in Zynga’s history. We are incredibly excited to have found a partner in Take-Two that shares our commitment to investing in our players, amplifying our creative culture, and generating more value for stockholders. With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.”